All about chips⦠[TradeSmith Daily]( All eyes on Nvidia⦠Intelâs trying to turn around a decade of underperformance… The elephant-sized risks of Taiwan Semiconductor… Unleashing An-E 2.0…
--------------------------------------------------------------- By Michael Salvatore, Editor, TradeSmith Daily Whether we like it or not, the word comes from the Goldman Sachs trading desk that Nvidia (NVDA) is âthe most important stock on planet earth.â It certainly feels that way. The semiconductor companyâs late-season earnings report comes as its stock has fallen nearly 9% from its all-time high. The Valentineâs Day top also pegged the recent high in the S&P 500 and Nasdaq 100, where NVDA represents about 4.2% and 5%, respectively. This heavy weighting — and past blowout earnings reports, which have added hundreds of billions to the companyâs market cap overnight — meant all eyes were on NVDA to deliver again after Wednesdayâs close. Thereâs risk in that. The shock of a miss wouldâve likely dragged the whole market lower. But deliver it did. It reported $22.1 billion in revenue against expectations of $20.4 billion, and earnings of $5.16 per share against expectations of $4.20. Thereâs the âbeat.â It also revised its forward revenue guidance to $24 billion. Thereâs the âraise.â Weâve shown you before how [the âbeat and raiseâ]( is exactly what you want to see in any stock reporting earnings. And with NVDA being the hardware backbone of the A.I. trend, this beat and raise was met with thunderous applause. The stock, previously down almost 9% from last weekâs close, is set to open more than 13% higher Thursday as I write. Thatâs an overnight reversal, peak to trough, worth roughly $350 billion.
Most interesting to me was three specific words CEO Jensen Huang used in his statement: âAccelerated computing and generative A.I. have hit the tipping point. Demand is surging worldwide across companies, industries and nations.â That phrase, âthe tipping point,â says it all. Weâre about to cross the Rubicon on A.I. technology, and the worldâs biggest tech leaders know it. And what this tells me, more than anything, is that the A.I. trend has staying power more than any buzzy tech investment story of the past decade. Think back to 5G, or 3D printing, or decentralized finance and NFTs. All of these trends came just about as fast as they went. But weâre more than a year into the A.I. dominance, and weâre seeing nothing but green flags for it to continue. Companies are continually beating earnings expectations and raising the bar. Waves of capital are flowing into virtually any stock responsible for future A.I. infrastructure. Even the competition is heating up. Take this under-the-radar news out of Intel (INTC), for example… RECOMMENDED LINK [Elon Muskâs NEW A.I. Project âWill Be Bigger Than Teslaâ](
One of Silicon Valleyâs legendary investors traveled all the way to Elon Muskâs Tesla Gigafactory to discover his next huge AI project. Something heâs calling Elonâs âA.I. 2.0.â And Elonâs very own words... â[A.I. 2.0] will be even bigger than Tesla.â If you position yourself correct now, before Elon makes the official public announcement... You could set yourself up to achieve generational wealth.
[Click here now to get all of the information]( ❖ Intelâs making moves for a turnaround…
Intel (INTC) has been around a long time, but not a good time. Its stock has managed to rise just 76% in the last decade… a pretty sad-looking chart when pitted against its competitors. Just look how it compares to Nvidia (NVDA), AMD (AMD), and Taiwan Semiconductor (TSM) since the bull market accelerated in 2017.
But could that be set to finally change? News came out Wednesday that Microsoft — you know, the worldâs biggest tech company and majority partner to OpenAI — has signed on with Intel to manufacture a custom computing chip. Details on what exactly this chip is and what it would do werenât explicitly stated. But allow me to connect some dots on this one. OpenAI CEO Sam Altman attended the Intel Foundry conference where Intel made the announcement. (Intel Foundry is the companyâs new manufacturing operation designed to compete with Taiwan Semiconductor — which weâll get to.) Intel also announced itâs partnering with Arm Holdings (ARM) — another red-hot A.I. chip stock — to manufacture chips in its factories. And the company is said to hold a special technology that should be useful at creating faster, more power-efficient chips designed for artificial intelligence. Intel lost its early chip manufacturing lead years ago — the primary reason its stock has disappointed. But when new CEO Pat Gelsinger stepped up three years ago, he set a goal to retake that lead by 2025. Since then, the main moves to get there seem to be what was announced Wednesday… along with potentially more than $10 billion in funding from the U.S. government. There are plenty of lines to read between on the Intel story. And to be clear, itâs a long shot even with all these developments. Intel has disappointed time and again with its inability to keep parity with other chipmakersâ manufacturing processes. On top of that, the stock just plain doesnât go up. Simple as it sounds, itâs rarely a good idea to buy stocks that donât go up. But the lynchpin of it all is Intelâs closest competitor, Taiwan Semiconductor (TSM), and the geopolitical risks surrounding it… ❖ Taiwan Semiconductor faces an elephant-sized risk…
And thatâs its profound economic importance to the worldâs No. 1 and No. 2 largest economies. China has made it perfectly clear that it considers the country of Taiwan an extension of the Chinese mainland. Taiwan largely, and increasingly, sees it differently. The Democratic Progressive Party in Taiwan recently won a third consecutive term, and its platform favors independence. Taiwan is so strategically important precisely because of Taiwanâs semiconductor industry, which makes up a fifth of the global industry, and Taiwan Semiconductor, the worldâs largest contract chip manufacturer. TSM makes more than 60% of the worldâs chips and more than 90% of the most advanced chips. Thus the problem. The worldâs most prolific chip manufacturer is headquartered in a country threatened to be absorbed by a communist country… which has no qualms about making this happen with the worldâs largest military. Investors rightly see the risks facing Taiwan as a reason to diversify away from Taiwan Semiconductorâs stock. Taiwan Semiconductor, itself, is building out a new plant in Japan to mitigate the risks. Still, the U.S. is not discounting a potential future where China attempts to take over Taiwan by force. Thatâs where the $280 billion CHIPS Act, signed in 2022 and designed to bolster U.S. manufacturing, comes into play. Investors arenât discounting that future, either — as we can see by the tremendous focus on U.S.-based semiconductor companies like Nvidia, AMD, and now Intel. I said recently that itâs [best to play it safe and steer clear of owning Chinese stocks](. I think that carries through to what weâre talking about here. We should follow where the big money is going and focus on the U.S. semiconductor renaissance playing out before us as the A.I. trend grows in importance. Weâre busy doing our part here at TradeSmith, too… RECOMMENDED LINK [The #1 Bubble-Avoiding Play for 2024 (That Could Also Lead to Windfall Profits)](
A lot of folks are looking ahead to 2024 and asking how to make it their best year financially. But many of them have zero idea about the bubble they accidentally invested in. This bubble is going to burst soon. Getting out early could be the difference between big profits and dropping a socioeconomic class. If youâre looking for the chance to add huge sums to your account in 2024 by ringing up one win after another... I recommend giving Jason Bodnerâs 3-step plan a hard look. [You can find out about the scheduled cash bubble pop here](. ❖ Introducing An-E 2.0…
If youâve been following TradeSmith for some time, you likely know all about [our proprietary A.I. software tool, An-E](. Short for Analytical Engine, this tool forecasts the share price of any stock we track 21 trading days out to the future. Since we started sharing ideas with our readers, one short-term trading strategy using An-Eâs forecasts generated a win rate of more than 88%… and an average return of more than 40%. Followers of TradeSmith should also know weâre not the kind of firm to rest on our laurels. Weâve been hard at work on improving An-E in the background, ensuring it continues to exceed your expectations. And next week, weâll show you [the result of $18 million in R&D spending and 36 machine-learning experts working tirelessly on An-E and its newest upgrade](. With An-E 2.0, weâve found a way to translate the algorithmâs predictive power into even bigger, even faster gains. Backtests have shown that An-E is able to improve its forecasted gains to 300%, 493%, and even 1,420% by using a new kind of trading strategy. And now, weâre inviting TradeSmith readers to try out An-E 2.0âs predictive power on a handpicked selection of stocks — including the likes of NVDA, INTC, and SMCI — completely free. [Ju st click here and learn more about how to get access.]( And be sure to tune in to tomorrowâs TradeSmith Daily, where Iâll share a video interview with one of the leading minds behind An-E 2.0… and heâll reveal a bit about how the new upgrade works. To your health and wealth, [Michael Salvatore]Michael Salvatore
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